What is basic financial accounting?

1. This article provides an overview of financial accounting fundamentals for non-accountants. The direction is to record financial information about the Business Accountants . First, what is “financial” accounting? It refers to recording information about money. So we talk about issuing an invoice to someone and paying that invoice, but we don't address changes in business value across the company because the latter situation doesn't involve specifics. Transactions involving money. Transaction A “transaction” is a business event that has a financial effect, such as selling something to a customer or purchasing something from a supplier. In Financial Accounting Services in New York , a transaction is the recording of information about funds related to an event. For example, we record the following events (transactions) in our accounting records: ● Obtain a loan from a lender ● Receive expense reports from employees ● Receive invoice from supplier ● sell products to consumers ● Remit sales tax to government ● pay wages to employees ● Send payroll taxes to the government Accounts

2. We record this information in “accounts”. An account is a separate, detailed record of a specific item, such as office supply expenses, accounts receivable, or accounts payable. You may have multiple accounts, the most common of which are: Cash This is the current cash balance that a business typically holds in a checking or savings account. Accounts receivable. This is a credit sale where the customer pays later. List. These are products that are held in inventory and ultimately sold to consumers. Fixed assets. This is a very expensive asset that a business plans to use for many years. Accounts payable. Payments made to suppliers that have not yet been paid. Increased costs . This is a debt that has not yet been billed to the business but will eventually be paid. Debt is cash lent to the business by someone else. Equity. This is the ownership interest in the business - the start-up capital and any subsequent profits retained in the business. Revenue Sales made to consumers (credit and cash). Cost of goods sold. The price of a product or service sold to consumers. maintenance cost. These are the various types of expenses required to run a business, including salaries, rent, utilities, and office supplies. Income tax. This is a tax you pay to the government on the profits you earn from your business. Transaction data entry

3. How do I enter information about transactions on this account? There are two ways to do this, described below. Software module items If you use accounting software to record financial accounting transactions, there may be online forms you can fill out for each major transaction, such as creating customer or invoices or recording vendor invoices. Each time you fill out one of these forms, the software automatically populates your account. Journal entries You can access the journal entry form in your accounting software or create journal entries directly. There is much more to the journal entry. Simply put, a journal entry must always affect at least two accounts, with debit entries recorded in one account and credit entries recorded in another. You can have more than one account, but the total dollar amount of debits must equal the total dollar amount of credits. The general ledger Accounts are stored in the general ledger. A master set of all accounts where all business transactions entered into an account with journal or software module entries are stored. Therefore, the general ledger is a document that contains all detailed financial accounting information for a company. If you want to understand details about a specific account, such as the current receivable amount, you can access the general ledger for that information. Most accounting software packages also offer a variety of reports that give you better insight into your business than just reading your accounts. Specifically, there are the Senior Notes and Senior Accounts Payable reports, which are used to determine current inventory in accounts receivable and Accounts Payable processing in New York , respectively. The Financial Statements The general ledger is also the source document for financial statements. There are several financial statements mentioned below. Other less frequently used items in financial statements include a statement of retained earnings and a number of disclosure items.

4. balance sheet The balance sheet lists a company's assets, liabilities, and equity as of the reporting date. financial charts An income statement lists a company's revenues, expenses, and profits and losses for a specific period of time. cash flow statement A Cash Flow Budgeting and Forecasting in Chicago statement lists the cash inflows and outflows generated by a business during a specific period. You can format it using direct or indirect methods. In summary, we have shown that financial accounting involves recording business transactions in accounts summarized in the general ledger, which is used to prepare financial statements.